Author: Manan Daga
The internet has affected our lives in numerous ways and has changed it for good, and for bad. This very internet has opened various opportunities for us to access everything with just one click. With time, even betting applications were developed and provided to us with such convenience because of the internet. Nowadays, it has become a common trend to find people using such betting applications. Most of these people are not even aware of the legality of such applications. Sometimes, a mere question does not arise in their minds, as to the legality of betting applications despite betting being illegal. Even if it arises, then no definite answer is found.
So, the purpose of this paper is to try to give that answer.
Section 65-B(15) of the Finance Act of 1994 says that, gambling or betting means something whose result may depend on and be determined by a chance or accident. The Public Gambling Act of 1867 (the Act) is the legislation which governs betting and gambling in India. The legislation was enacted in 1867, which makes it unreasonable to have incorporated a provision for online betting or betting applications. However, even now, as per Section 1 of the Act it only talks about “common-gaming houses” and not online betting, which could have been added through amendments. Moreover, the Information Technology Act of 2000 is silent on the issue of betting applications too. Therefore, there is a lack of particular and precise law for banning or making betting applications illegal.
The working of betting applications also takes place in a unique way. These applications are mainly registered outside India because bookmaking in India for sports is illegal as of now. So, as per the current statutes and case laws, one is not prohibited from betting on applications which place a bet with a bookmaker outside the boundaries and territorial limits of India. The Public Gambling Act confines it to common-gaming houses and the procedural law to be followed for it.
The trick question lies in the concept of games of skill and games of chance. As per Section 12 of the Act, it does not include games of skill as a part of gambling. There have been various cases which have held that gambling like prize competitions are illegal, and they are not games of skill as one does not apply their mind to win it.
Moreover, apex court in the case of KR Lakshmanan has held that horse-race betting is considered a game of skill. However the status of betting on sports being a game of skill is in consideration in the case of Geeta Rani v. Union of India and Others. However, the real dilemma arises in the case of betting applications. Betting applications are of many types. Some facilitate fantasy betting like betting on sports, then some facilitate normal betting or gambling, but only done online. In this case, unless the apex court decides on the status of betting on sports, the dilemma shall persist.
However, a few high courts in India in some cases have held betting applications using fantasy leagues as a game of skill. Is selecting a team a game of skill or not? One school of thought believes that it is not since you choose a team, and it is the skill of the players and their performance which fetch you money. The other school of thought believes it to be a game of skill since you have to use your skill to determine the player’s ability to perform in that match. The courts have often sided with the latter school of thought, and have held it to be game of skill. It is because a person has to use his brain in choosing a team, and it is not sheer luck. You need to apply your mind to know how well a player is, and that way you can assess the player’s value.
In the current scenario of betting and gambling, it is pertinent to think about frauds which can happen due to this. A person may randomly accept the terms and conditions of the betting applications which may be arbitrary or even exploitative. These applications open various avenues for fraudsters to lure innocent people into their traps. Normally, one needs to stay vigilant of fraud and, one needs to stay even more vigilant when such sensitive issues are involved. Eventually, the people who use these applications have to be aware. They should read the terms and conditions, make sure that they do not fall in a debt trap, read and analyse the reviews of the application, and communicate if something suspicious is observed.
This issue of betting applications can be considered to be in its infant stage. What has started as a game of skill, can be exploited into something more in future. We need to realise that in such certain ambiguous state of things, it is advised that some legislation is passed regulating the use of betting applications. These applications still have a lot of uncertainty. Firstly, the statutes remain silent about them. Secondly, the evasion based on the geographical boundaries of India persists.
Thirdly, the question of it being a game of skill or a game of chance, and it just does not apply to fantasy betting applications but to all betting applications. Lastly, the lack of binding case laws results in the possibility of such provisions being misused. With such a fragile state of laws and regulations on betting applications, its exploitation and abuse are not far away, if these are not regulated soon. Even though the primary question of the legality of these applications has been addressed, this opens a series of issues as to its checks and balancing, regulating, and monitoring.
Therefore, once we are certain of the legality of these applications, then the real issues of managing it, keeping it off minors, ensuring its users’ safety, and many more will emerge. The hurdles are not yet cleared but are merely starting to appear.